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High inflation and the healing of economy at the end of communist era in Poland

Why there were so many problems with food? We were always convinced that all our economical problems were caused by export to Soviet Union at very cheap prices. Later I learnt that people in Soviet Union were sure that their problems were caused by sending food to other friendly countries - Poland among them.

Of course the roots of the food problems were more complex that that. Years of planned communist economy, lack of development in agriculture and too much emphasis on heavy industries caused deficiency in food production. People were earning more but the food prices were fixed while Poland had more and more debts to pay. The weak Polish currency did not allow importing any oriental food. Bananas and oranges were like luxury products. Coffee was outrageously expensive but tea was still there. Yes, as far as I remember the shops in Krakow had tea, vinegar and pickles available without problems. Read the earlier part of the article entitled: Period of Wild Economy and Big Hopes.

KuponLets try to list the ration coupons chronologically:

  • sugar since July 1976
  • meat and sausages since April 1981
  • butter, margarine, lard, flour and rice since May 1981
  • cigarettes, alcohol, detergent, soap, chocolate and candies since August 1981
  • diapers since October 1981

After martial law (December 13, 1981) the following ration coupons were introduced:

  • gasoline for cars and… school notebooks since April 1982
  • shoes since Winter 1982/1983

This is of course not all. For instance the special cards were emitted for Christmas time with some additional products.

Some remarks to the list:

I think, one could buy 2 pairs of shoes per year. The choice was not that great. As for the petroleum, people start buying on the massive scale cars with Diesel engine because Diesel was not rationed and cheaper than the refined gasoline. I still remember how quiet the streets were in that time and I really miss this since right now streets are just overcrowded in cars (2002). The public transportation was serving almost everybody since people were driving their cars only on special occasions. I did not even mention the fact that one had to wait to be assign (and buy) an apartment for over 10 years, the waiting times for cars were also long.

How did people deal in this situation?

The implementing of rationed products calmed a market a bit. Everybody knew that he/she would be able to buy the assigned allowance. Of course, in some areas there were problems even to receive the rationed amount but it was not a rule. Besides, some products were available on the free market but in higher prices.

It was also a time when people in Poland benefited greatly from the individual and organized help from other countries. I remember that my family received numerous packages with food and used and new clothing from German families, from people which we even did not know. We were probably more lucky than the average person because my parents knew several foreign languages and they did have many friends abroad before the crisis. But I know that many people were receiving help especially since some countries allowed sending parcels to Poland without any tax since the difficult situation there was known. The help from many foreign organizations was also distributed through the church.

When the food coupons were lifted? The rationed sale for butter, margarine and lard was suspended in June 1983 but the market was still unstable so that the rationed sale had to be enforced again in November of the same year. In 1985 the rationed sale for sugar, flour and butter products was suspended. The rationed sale of meat was lifted only in July, 1989.

1989 year - was a very interesting time in Polish (and also other EE countries) history. The last communistic government with a prime-minister Mieczyslaw Rakowski (a journalist from a renowned Polish newspaper "Polityka") started a very courageous economical reform by liberating the prices. First, Rakowski's reform caused the hyperinflation and some chaos in economy but it eventually lead to the more stable economy. It started a healing of the Polish economy and the products became more and more available. This reform was continued by the first free Solidarity government with the finance minister, Leszek Balcerowicz. This government was created after so called round table negotiations and the first free elections in the same year.

Recommended reading(s):

If you want to understand political, social and economical changed that takes place in Poland in the mid-1980 I recommend an excellent book written by Jadwiga Staniszkis entitled: The Dynamics of the Breakthrough in Eastern Europe: The Polish Experience

See also this book about Polish economy Poland's Jump to the Market Economy (Lionel Robbins Lectures) by Jeffrey Sachs (Author)

Jeffrey Sachs is not only a Harvard professor who knows a lot about world economies but his ideas influenced directly Polish economy through reforms done by Polish finance minister, Leszek Balcerowicz.

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